Indonesia rice imports spike as Jakarta shores up stocks

JAKARTA – Indonesia recorded a large increase in rice imports in the first eight months compared to the same period last year, the statistics agency said recently, as Southeast Asia’s biggest economy seeks to boost stocks of its staple commodity.

Global rice prices rose to a 15-year high last week after top producer India’s decision in July to ban exports of non-basmati rice, citing several factors including soaring domestic prices and “extreme climatic conditions”.

Indonesia imported 1.59 million tons of rice from January to August this year, Statistics Indonesia head Amalia Adininggar Widyasanti said, while more than 429,000 tons of rice were imported for the whole of 2022.

“Rice imports from January to August 2023 experienced quite a high increase compared to the same period last year,” Widyasanti told reporters, without disclosing the import figure for the same period last year.

Most rice imports came from Southeast Asian neighbors, with Thailand sending 802,000 tons and Vietnam exporting 674,000 tons of the commodity over the period.

The government had set an import quota of 2.3 million tons of rice this year to maintain price stability because of expected disruption to rice production caused by the El Niño weather pattern.

But the rice imports were complicated by import restriction measures taken by other countries including India, President Joko Widodo said on Friday.

“We want to strengthen our strategic reserve of rice, but even importing it is difficult, unlike in the past,” he said in a speech.

On Thursday, Widodo ordered state-owned logistics company Bulog to release its reserve stocks to the market in order to bring down rice prices.

The nationwide rice price averaged 14,490 rupiah ($0.94) as of Friday, an increase of around 16 percent compared to the same period last year, according to data from the National Food Agency.

Meanwhile, a 15-year high in rice prices, prompted by top exporter India’s restrictions on overseas sales, should be a wake-up call on how climate change can disrupt food supplies, experts say.

Rice prices jumped 9.8 percent in August, bucking decreases in other staples, the Food and Agriculture Organization said last week.

That followed the July decision by India, which accounts for 40 percent of global rice exports, to ban the overseas sale of non-basmati rice.

The government cited soaring domestic prices for the staple, caused by geopolitics, the El Niño weather pattern and “extreme climatic conditions.”

This year is expected to be the hottest in human history, and the impacts of the seasonal El Niño weather pattern could make conditions even harsher.

Despite severe flooding in parts of northern India, this August was the country’s hottest and driest on record.

The monsoon season that brings up to 80 percent of the country’s annual rain has been far below normal levels.

India’s July restrictions followed a decision last September to ban exports of another variety of rice that is a staple in parts of Africa.

Up to eight percent of global rice exports for 2023/24 could now be taken out of the market, according to analysis by BMI, Fitch Group’s research arm.

For now, the crisis offers an opportunity for India’s rivals, including number two and three exporters, Thailand and Vietnam.